Divide Widens Between Consumer, Investment Banks: Today's Outrage

NEW YORK (TheStreet) -- Bank of America (BAC Quote) provided more evidence today that the consumer is still suffering.

The BofA loss, blamed in large measure on credit issues and "stress on the consumer," echoes the Citigroup(C Quote) report yesterday.

Meanwhile, investment banking brought outsized profit for JPMorgan(JPM Quote), with gains in fixed-income trading masking its own consumer credit issues. Goldman Sachs (GS Quote) also delivered solid profit this week, due largely to trading in the bond markets.

The great divide between consumer banks and investment banks is further exaggerated by the fact that JPMorgan and Goldman have escaped the TARP trap.

BofA's $2.2 billion third-quarter loss includes $893 million in dividend payments to Uncle Sam. Citi would have eked out a small profit, but reported a net loss because of dividend payments to the Treasury and costs related to converting government's preferred shares into common shares.

Meanwhile, much of Goldman's improvement over previous quarters is the result of not having to pay a dividend to the government. JPMorgan didn't even mention TARP in its earnings report this week, but the bank had paid cumulative dividends to the U.S. of $795 million before exiting the bailout program in June.

The difference in government dividend payments among the banks is remarkable: BofA is paying more in a single quarter than JPMorgan paid in total.